I. The State Council Issues the “Opinions on Improving the Ecological Protection Compensation Mechanism”

　　　On April 28, 2016, the General Office of the State Council issued the “Opinions on Improving the Ecological Conservation Compensation Mechanism” (Guobanfa [2016] No. 31).

　　The "Opinions" emphasize the need to firmly establish the development philosophy of innovation, coordination, green development, openness, and shared benefits; continuously improve the transfer payment system; explore the establishment of a diversified ecological protection compensation mechanism; gradually expand the scope of compensation; reasonably raise compensation standards; effectively mobilize the enthusiasm of the entire society to participate in ecological and environmental protection; and promote ecological civilization construction to a new level.

　　The “Opinions” propose that, guided by the principles of “unified rights and responsibilities with reasonable compensation, government-led with social participation, comprehensive consideration and transformative development, pilot programs first followed by steady implementation,” efforts should be focused on effectively implementing ecological protection and compensation tasks in key areas such as forests, grasslands, wetlands, deserts, oceans, waterways, and cultivated land.

　　By 2020, full coverage of ecological protection compensation will be achieved in key areas such as the aforementioned priority sectors, prohibited development zones, and key ecological function zones. The level of compensation will be aligned with the state of economic and social development. Pilot demonstrations of cross-regional and cross-basin compensation will have made significant progress, a diversified compensation mechanism will have been preliminarily established, and a system of ecological protection compensation that is well-suited to China’s national conditions will be basically in place.

　　The “Opinions” clearly state that innovation in institutional mechanisms across seven areas will be promoted:

　　First, establish a stable investment mechanism, raise funds through multiple channels, and intensify efforts in protection and compensation.

　　Second, we will improve the compensation mechanism for key ecological areas, delineate and strictly adhere to ecological protection redlines, and study and formulate relevant ecological protection compensation policies.

　　Third, we will promote horizontal ecological compensation and develop guidelines for a horizontal ecological compensation mechanism that is primarily driven by local governments with financial support from the central government.

　　Fourth, we will improve and refine the supporting institutional framework. Based on the capacity to produce ecological products, we will perfect calculation methodologies and accelerate the establishment of a system of ecological protection compensation standards.

　　Fifth, we will innovate the policy coordination mechanism and explore the establishment of a new mechanism for jointly promoting ecological and environmental protection through coordinated efforts in ecological and environmental damage compensation, market trading of ecological products, and ecological conservation compensation.

　　Sixth, we will promote targeted poverty alleviation by integrating ecological conservation compensation with innovative approaches to fund utilization. We will launch pilot programs for comprehensive ecological compensation in impoverished areas and explore new pathways for poverty alleviation through ecological conservation.

　　Seventh, we must accelerate the advancement of rule-of-law development and continuously promote the institutionalization and legalization of the ecological protection compensation system.

　　Comment

　　Implementing ecological protection compensation is an important means of mobilizing the enthusiasm of all parties and safeguarding the ecological environment; it is also a key component of building an ecological civilization system.

　　The issuance of the “Opinions” represents a concrete measure for comprehensively and deeply advancing the reform of the ecological civilization system. It places particular emphasis on innovation in institutional mechanisms, including the collection, allocation, monitoring, evaluation, and trading of ecological protection compensation funds. By establishing practical and feasible mechanisms, the “Opinions” aim to remove the current “bottlenecks” hindering ecological protection compensation at the top-level design stage, and to explore the establishment of a diversified ecological protection compensation system. This demonstrates China’s commitment to the scientific and rule-of-law spirit in ecological civilization construction, and its significance and impact will be far-reaching.

　　II. The Ministry of Finance and the State Administration of Taxation issued the “Notice on Fully Promoting the Reform of the Resource Tax.”

　　On May 10, 2016, the Ministry of Finance and the State Administration of Taxation issued the “Notice on Fully Promoting the Reform of the Resource Tax” (Cai Shui [2016] No. 53), which announced the full-scale implementation of the resource tax reform starting July 1, 2016.

　　The Notice requires that, through the comprehensive implementation of fee-to-tax reform and a shift to value-based taxation, we should streamline the relationship between resource taxes and fees, establish a resource tax system that is standardized and fair, appropriately regulated, and highly efficient in collection and administration, and effectively leverage its role in generating revenue, regulating the economy, promoting the efficient and intensive use of resources, and protecting the ecological environment.

　　The Notice clarifies the main components of the resource tax reform, including expanding the scope of resource tax collection and launching pilot programs for water resource tax reform; implementing a reform to base mineral resource tax assessments on market prices; comprehensively reviewing and abolishing fees and funds related to mineral resources; appropriately setting resource tax rates; strengthening the management of preferential tax policies for mineral resources; and enhancing the efficiency of comprehensive resource utilization.

　　The ad valorem taxation method will be fully rolled out. Building on the previous reform that has already implemented ad valorem taxation for resource taxes on six commodities—crude oil, natural gas, coal, rare earths, tungsten, and molybdenum—this reform will extend ad valorem taxation to the vast majority of mineral products. However, guided by the principle of facilitating tax administration, a few mineral products—such as clay and sand and gravel—which are characterized by dispersed operations, predominantly cash transactions, and difficult-to-control tax compliance—will continue to be subject to fixed-amount taxation based on quantity.

　　Comment

　　The comprehensive promotion of the resource tax reform is a major policy adjustment aimed at effectively addressing existing problems in the resource tax system and aligning with the objectives of the resource tax reform. It also constitutes an important component of China’s efforts to deepen fiscal and taxation system reforms in the new era.

　　This is another major tax reform introduced by China following the comprehensive rollout of the pilot program to replace business tax with value-added tax on May 1, 2016. It fully implements the spirit of the 18th National Congress of the Communist Party of China and the Third, Fourth, and Fifth Plenary Sessions of the 18th Central Committee, in accordance with the “Five-in-One” overall layout and the “Four Comprehensive” strategic plan. It firmly establishes and puts into practice the development philosophy of innovation, coordination, green development, openness, and shared benefits, effectively leveraging the regulatory role of taxation to promote the sustained and healthy development of resource-intensive industries and drive the adjustment of the economic structure and the transformation of the development model.

　　III. The Supreme People’s Court Issues the “Opinions on Providing Judicial Services and Guarantees to Promote Ecological Civilization Construction and Green Development”

　　On May 26, 2016, the Supreme People's Court issued the “Opinions on Fully Leveraging the Role of Judicial Functions to Provide Judicial Services and Guarantees for Promoting Ecological Civilization Construction and Green Development” (Fa Fa [2016] No. 12).

　　The “Opinions” primarily set forth provisions focusing on the following aspects:

　　First, it emphasizes serving the overall national interest and further clarifies the general requirements and safeguard measures for people's courts to serve and protect ecological civilization construction and green development.

　　Second, we emphasize the primacy of guiding principles and explicitly introduce modern environmental judicial concepts.

　　Third, we will adhere to a problem-oriented approach and emphasize the adjudication of key environmental resource cases.

　　Fourth, maintain a moderate degree of foresight and explore ways to refine the rules for handling new types of cases in emerging fields. Fifth, strengthen collaborative adjudication and fully leverage the collective synergy of environmental and resource-related judicial proceedings.

　　Comment

　　The “Opinions” represent a significant step in thoroughly implementing the spirit of the 18th National Congress of the Communist Party of China and the Third, Fourth, and Fifth Plenary Sessions of the 18th Central Committee, promoting the comprehensive implementation of the 13th Five-Year Plan, fully leveraging the judicial functions of the people’s courts, and providing fair and efficient judicial services and safeguards to accelerate the advancement of ecological civilization and green development. They are the outcome of careful investigation and research conducted to better fulfill the judicial functions, enhance the rule-of-law level of ecological and environmental governance, effectively protect the environmental rights and public interests of the people, ensure the safety of the nation’s natural resources and ecological environment, and address the most pressing issues that urgently need to be resolved in judicial practice.

　　IV. The Ministry of Natural Resources Releases the “China Mineral Resources Report (2016)”

　　On September 22, 2016, the Ministry of Natural Resources released the “China Mineral Resources Report (2016).”

　　The report publicly released for the first time several authoritative indices in the mineral industry. The main contents of the report include China’s status of mineral resources, exploration and development utilization of mineral resources, geological environmental protection of mines, management and policies for mineral resources, geological and mineral survey, evaluation, and data services, as well as scientific and technological innovation and international cooperation.

　　The report shows that during the 12th Five-Year Plan period, significant growth was observed in the identified reserves of key mineral resources such as coal, natural gas, manganese ore, bauxite, nickel ore, tungsten ore, molybdenum ore, gold ore, and phosphate rock. Since the State Council approved shale gas as a new mineral resource category in 2011, cumulative proven geological reserves have reached 544.1 billion cubic meters. The evaluation results for the potential of 23 important mineral resources indicate that China has enormous exploration potential. Among the major minerals, identified reserves increased for 41 types, while they declined for 5 types; notably, the proven geological reserves of shale gas—a newly designated mineral resource—have grown rapidly.

　　Compared with the end of the 11th Five-Year Plan period, by the end of the 12th Five-Year Plan period, the remaining technically recoverable reserves of petroleum increased by 10.4%, natural gas increased by 37.4%, and coalbed methane increased by 132.3%. The newly identified resource reserves of natural gas, coalbed methane, shale gas, manganese ore, tungsten ore, and molybdenum ore accounted for more than 30% of the cumulative identified resource reserves.

　　The report states that, in terms of conserving and making comprehensive use of mineral resources, we have basically ascertained the current status of the “three rates” for mineral resources, preliminarily established an evaluation system for the “three rates” indicators of major minerals, and prioritized the promotion of advanced and applicable technologies for resource conservation and comprehensive utilization. The construction of demonstration bases for the comprehensive utilization of mineral resources has achieved remarkable results, and a revised version of the catalog of technologies encouraged, restricted, and phased out for the conservation and comprehensive utilization of mineral resources has been released.

　　The “three-rate” indicators for 27 types of minerals have been released, and 210 advanced and applicable technologies have been selected and promoted. The first batch of 40 demonstration bases for the comprehensive utilization of mineral resources covers seven major sectors, including oil and gas, coal, and non-ferrous metals. The central government has allocated 20 billion yuan in funding, while enterprises themselves plan to invest an additional 174.2 billion yuan.

　　Since the 12th Five-Year Plan, the Chinese government has continuously advanced reforms of the mineral resource tax and fee system. The resource tax reform has been carried out following the principle of primarily levying taxes based on value, with quantity-based levies serving as a supplementary approach. The rate of the mineral resource compensation fee has been reduced to zero. During the 12th Five-Year Plan period, the amount collected in mineral resource compensation fees totaled 88.44 billion yuan, an increase of 71.3% compared to the 11th Five-Year Plan period.

　　Comment

　　The “China Mineral Resources Report” has always served as a window for gaining insight into the overall state of China’s mineral resources. The report highlights the major achievements made by China during the 12th Five-Year Plan period in areas such as mineral resource exploration and development, geological environmental protection of mines, and geological surveys and evaluations of mineral resources. It also details how the Chinese government has actively promoted administrative streamlining and decentralization, vigorously pushed forward reforms of the administrative approval system and the mineral resource tax and fee system, intensified regulatory oversight, enhanced service levels, adhered to the principle of balancing development with protection, fully leveraged the decisive role of the market in resource allocation, practiced administration based on law and transparency, stimulated vitality in the mining sector, guided and standardized mining market behavior, and ensured that mineral resource management becomes more standardized and orderly.

　　V. The CPC Central Committee and the State Council have issued the "Opinions on Improving the Property Rights Protection System and Protecting Property Rights in Accordance with Law."

　　On November 4, 2016, the CPC Central Committee and the State Council issued the "Opinions on Improving the Property Rights Protection System and Safeguarding Property Rights in Accordance with Law," which laid out a comprehensive plan for perfecting the property rights protection system and promoting the rule of law in property rights protection. The "Opinions" clearly defined the overall requirements for improving the property rights protection system and safeguarding property rights in accordance with law, and proposed specific reform measures from 10 different aspects.

　　Strengthening property rights protection fundamentally requires fully advancing the rule of law. The "Opinions" point out that those who have secure property also have a stable mindset; effective protection and realization of economic entities' property rights are the foundation for sustained and healthy economic and social development.

　　We must accelerate the improvement of the property rights protection system, effectively safeguard the property rights of economic entities and citizens of all ownership types in accordance with the law, enhance the public’s sense of security regarding their property and wealth, boost social confidence and foster positive expectations, strengthen the entrepreneurial and innovative drive of various economic actors, uphold social equity and justice, and ensure the sustained, healthy development of the economy and society as well as the long-term stability and security of the nation.

　　In promoting property rights protection, the "Opinions" emphasize adhering to the principle of equal protection and establishing a sound property rights protection system centered on fairness. Property rights of the public-owned economy are inviolable, and property rights of the non-public-owned economy are equally inviolable. We must uphold comprehensive protection, ensuring that property rights encompass not only ownership, creditor’s rights, and equity rights, but also intellectual property rights and various other intangible property rights. We must adhere to protection under the rule of law, continuously improving the legal framework of the socialist market economy, strengthening law enforcement, and ensuring that there are laws to follow and that these laws are strictly enforced. We must promote joint participation, building a government that is governed by the rule of law, accountable, and trustworthy, enhancing citizens’ awareness of property rights protection and contractual consciousness, and strengthening social oversight. We must adopt a holistic approach, addressing both the symptoms and root causes, focusing on the long term while tackling immediate challenges, promptly resolving prominent issues in property rights protection, and accelerating the establishment of a long-term mechanism for property rights protection.

　　Comment

　　The property rights system is the foundation for the effective operation of the socialist market economy. The “Opinions” are of great significance for perfecting the socialist market economic system and achieving sustained, healthy, and coordinated economic and social development. Adhering to a problem-oriented approach and starting from reality, the document focuses on prominent issues in property rights protection and proposes “practical and effective” reform measures that are highly targeted and relevant to current needs. As the building of a law-based government and government integrity progresses and related legal systems are further refined, property rights protection will enter a track of institutionalization and rule of law, thus establishing a long-term mechanism for protecting property rights.

　　VI. The State Council approves the “National Mineral Resources Plan (2016–2020).”

　　On November 8, 2016, the State Council issued the "Approval on the National Mineral Resources Plan (2016–2020)" (Guo Han [2016] No. 178). With the approval of the State Council, the plan was officially promulgated and implemented by the Ministry of Natural Resources, the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Finance, the Ministry of Environmental Protection, and the Ministry of Commerce. The Plan consists of 8 chapters and 33 sections.

　　The “Plan” comprehensively implements the development philosophy of innovation, coordination, green development, openness, and shared benefits. With the goal of ensuring resource security and focusing on enhancing the quality and efficiency of mining development, it strengthens resource protection and promotes their rational utilization. It also properly balances the relationships among government and market, short-term and long-term interests, local and overall interests, resources and the environment, as well as domestic and international markets. The Plan advances supply-side structural reform, optimizes the pattern of resource development and protection, accelerates the green transformation and upgrading of the mining industry, promotes practical cooperation in the mining sector, and ensures that resource development benefits and serves the people, thereby providing a reliable energy and resource guarantee for fully building a moderately prosperous society.

　　The “Plan” clearly sets forth the overall goal: By 2020, we will have basically established a resource security system that is safe, stable, and economically viable; basically developed a green mining development model characterized by resource conservation and efficiency, environmental friendliness, and harmony between mines and their surrounding areas; and basically built a modern mining market system that is unified and open, features orderly competition, and is full of vitality. We will significantly enhance the quality and efficiency of mining development and forge a new pattern for resource security and mining development.

　　Specific objectives include:

　　Reserves of critical mineral resources continue to grow steadily. We aim to discover 5 to 8 oilfields each with reserves exceeding 100 million tons and 5 to 10 gasfields each with reserves exceeding 100 billion cubic meters. We will establish 103 energy and resource bases, designate 267 nationally planned mining areas, increase the proportion of large- and medium-sized mines to over 12%, raise the output rate of major mineral resources by 15%, complete geological environment remediation and restoration tasks on 500,000 hectares of historically abandoned mine sites, further expand the scope of competitive bidding for mining rights, and establish a national system of mineral resource rights fees.

　　Comment

　　The “Plan” outlines the development direction for China’s exploration, exploitation, utilization, and protection of mineral resources over the coming period. It clearly defines and details key priorities and tasks, providing a solid foundation and guiding principles for safeguarding national resource security, leading structural reforms on the supply side of the mining industry, and standardizing activities related to resource exploration, exploitation, and utilization. The Plan serves as the overall blueprint and action program for China’s mineral resource management reform and mining economic development over the next five years.

　　The new round of planning integrates the development concepts of innovation, coordination, green development, openness, and shared benefits to coordinate all tasks related to the exploration, development, utilization, and protection of mineral resources.

　　7. The Supreme People's Court and the Supreme People's Procuratorate issued the “Interpretation on Several Issues Concerning the Application of Law in Handling Criminal Cases of Illegal Mining and Destructive Mining.”

　　On November 28, 2016, the Supreme People's Court and the Supreme People's Procuratorate jointly issued the "Interpretation on Several Issues Concerning the Application of Law in Handling Criminal Cases of Illegal Mining and Destructive Mining" (Fa Shi [2016] No. 25). The "Interpretation of the Supreme People's Court on Specific Issues Concerning the Application of Law in the Trial of Criminal Cases of Illegal Mining and Destructive Mining" was simultaneously repealed.

　　The “Interpretation” consists of 16 articles and primarily covers three key areas: it clarifies the criteria for conviction and sentencing for the crimes of illegal mining and destructive mining; specifies the qualitative classification and criminal liability standards for illegal sand mining activities; and also addresses substantive issues such as aggravated penalties applicable to crimes involving mineral resources, corporate criminal liability, joint criminal offenses, definitions of relevant terms, and valuation determinations. Additionally, it provides interpretations on procedural matters including the handling of illegal proceeds and criminal tools, as well as specialized forensic examinations.

　　According to the Interpretation, five categories of circumstances shall be deemed as “serious in nature,” including: cases where the value of mined mineral products or the value of damage caused to mineral resources exceeds RMB 100,000 but is no less than RMB 300,000; cases involving mining in nationally planned mining areas or in mining areas of significant importance to the national economy, mining specific mineral species subject to protective mining regulations prescribed by the state, or mining within prohibited mining zones or during prohibited mining periods, where the value of mined mineral products or the value of damage caused to mineral resources exceeds RMB 50,000 but is no less than RMB 150,000; cases in which an individual has been subjected to administrative penalties for illegal mining more than twice within two years and then commits another act of illegal mining; cases causing severe damage to the ecological environment; and other circumstances deemed serious.

　　With regard to the stages of concealing, transferring, acquiring, or acting as an agent for the sale of such items, the Interpretation explicitly stipulates that anyone who knowingly conceals, transfers, acquires, acts as an agent for the sale of, or otherwise disguises or hides mineral products and their proceeds derived from criminal activities shall be convicted and punished for the crime of concealing or hiding criminal proceeds and gains. If the person has conspired beforehand, they shall be treated as a co-perpetrator.

　　Comment

　　The Interpretation clarifies three key controversial issues in the determination of the crime of illegal mining:

　　First, how to accurately understand the elements constituting the crime of illegal mining;

　　Second, how to evaluate and determine the prerequisite nature of administrative penalties in the crime of illegal mining;

　　Third, it clarifies how to determine the validity of assessments of the amount of damage caused to mineral resources. At the same time, it refines the relevant provisions of the 1997 revised Criminal Law and the 2003 Interpretation issued by the Supreme People's Court on Several Issues Concerning the Specific Application of Laws in the Trial of Criminal Cases Involving Illegal Mining and Destructive Mining, thereby standardizing the order of mineral resource development and achieving the goals of effectively protecting mineral resources and effectively punishing illegal mining crimes.

　　8. The Ministry of Natural Resources and other departments have issued the “Measures for Unified Registration of Property Rights over Natural Resources (Trial).”

　　On December 20, 2016, the Ministry of Land and Resources, the Office of Institutional Establishment under the Central Committee, the Ministry of Finance, the Ministry of Environmental Protection, the Ministry of Water Resources, the Ministry of Agriculture, and the State Forestry Administration issued a notice on the promulgation of the “Measures for the Unified Registration of Property Rights over Natural Resources (Trial)” (Guotu Zifa [2016] No. 192).

　　The overall guiding principle of these Measures is to build a unified system of property rights registration for natural resources, based on real estate registration. This system will provide unified property rights registration for all natural resources, including water flows, forests, mountains, grasslands, wastelands, tidal flats, and mineral resources. It will gradually clarify the boundaries between resources owned by the entire people and those owned collectively; delineate the boundaries between resources owned by the entire people and those under the ownership exercised by governments at different levels; define the boundaries among different collective owners; and distinguish among various types of natural resources. Furthermore, it will clearly specify the rights and protection scopes associated with different types of national natural resources, thereby promoting the rule of law in property rights registration.

　　The Measures cover general provisions, the Natural Resources Registry, general registration procedures, as well as the registration of natural resources such as national parks, nature reserves, wetlands, and waterways; management and application of registration information; and supplementary provisions. Two appendices are also included: the "Natural Resources Registry Format" and the "Pilot Program for Unified Property Rights Registration of Natural Resources." To actively and steadily promote the unified registration of property rights over natural resources, pilot work was carried out in selected regions from December 2016 to February 2018.

　　Comment

　　The unified registration of property rights over natural resources is an important measure for deepening the reform of the ecological civilization system, building a beautiful China, and implementing the new development philosophy. Conducting unified registration of property rights over natural resources on the basis of real estate registration helps achieve the goal of clearly defining the “four boundaries,” supports the establishment of a property rights system for natural resource assets that features clear ownership, well-defined responsibilities and powers, and effective oversight, and serves the protection and regulation of natural resources.

　　9. The Supreme People's Court and the Supreme People's Procuratorate issued the “Interpretation on Several Issues Concerning the Application of Law in Handling Criminal Cases of Environmental Pollution.”

　　On December 23, 2016, the Supreme People's Court and the Supreme People's Procuratorate issued the “Interpretation on Several Issues Concerning the Application of Law in Handling Criminal Cases of Environmental Pollution” (Fa Shi [2016] No. 29).

　　The “Interpretation” comprehensively and systematically sets forth specific guidelines on issues such as the criteria for conviction and sentencing for relevant crimes, drawing upon the characteristics of current environmental pollution offenses and problems reflected in judicial practice, and in accordance with relevant provisions of the Criminal Law and the Criminal Procedure Law, through 18 articles.

　　Mainly includes content in 10 aspects:

　　(1) Clarified the specific criteria for determining guilt and sentencing in crimes involving environmental pollution;

　　(2) Clarified the specific standards for conviction and sentencing regarding the crimes of illegally disposing of imported solid waste, unauthorized import of solid waste, and dereliction of duty in environmental supervision.

　　(3) Clarified the specific application of the criminal policy of combining leniency and strictness;

　　(4) Clarified the rules for handling joint crimes involving environmental pollution;

　　(5) Clarified the principles for handling concurrent offenses involving environmental pollution crimes;

　　(6) Clarified the issue of criminal liability for falsifying environmental impact assessments;

　　(7) Clarified the qualitative nature and related issues concerning the sabotage of environmental quality monitoring systems;

　　(8) Clarified the standards for conviction and sentencing of units committing crimes related to environmental pollution;

　　(9) Clarified the scope and identification criteria for “toxic substances”;

　　(10) Clarified the admissibility of monitoring data as evidence.

　　Comment

　　Protecting the environment is a fundamental national policy of our country and an important component of the sustainable development strategy. Following the establishment of the strictest system for farmland protection and the strictest system for water resource protection, the implementation of the strictest environmental protection system has been proposed and has now become a societal consensus. The judiciary is a crucial tool for environmental protection and plays an irreplaceable role in advancing the modernization of the environmental governance system.

　　In light of some new developments and issues that have emerged in recent years regarding crimes involving environmental pollution, the Supreme People's Court and the Supreme People's Procuratorate have comprehensively revised and improved the “2013 Interpretation.” This will play a crucial role in further enhancing the effectiveness of legally punishing environmental pollution crimes, intensifying judicial protection of the environment, effectively safeguarding the ecological environment, and promoting the construction of a Beautiful China.

　　X. The Central Deepening Reform Group reviewed and approved the “Reform Plan for the Transfer of Mining Rights” and the “Reform Plan for the Mineral Resource Equity Fee System.”

　　On December 30, 2016, the 31st meeting of the Central Leading Group for Comprehensively Deepening Reform reviewed and approved documents including the “Reform Plan for the Transfer of Mining Rights” and the “Reform Plan for the Mineral Resource Equity Fee System.”

　　The meeting emphasized that perfecting the system for the transfer of mining rights is a crucial safeguard for protecting the state’s ownership rights over mineral resources. It is necessary to promote competitive bidding for mining rights, strictly limit the practice of transferring mining rights through agreements, adjust the authority for approving mining rights, and strengthen regulatory oversight and services related to such transfers. With the core goal of safeguarding and realizing the state’s fundamental rights and interests in mineral resources, we must streamline the tax and fee system for mineral resources, appropriately regulate revenue from mineral resource exploitation, and establish a new system of mineral resource royalties that is tailored to China’s specific characteristics.

　　Among these, regarding the reform of the mineral resource rights and royalties system, the “Draft Scheme for the Reform of the Mineral Resource Rights and Royalties System,” jointly researched and drafted by the Ministry of Finance and the Ministry of Natural Resources and released in October 2015 (for public comment), outlines the framework and key components of the mineral resource rights and royalties system, as well as supporting reform policies.

　　The specific contents of the “Plan” include:

　　First, in the stage of mineral rights transfer, we should improve the system for transferring mineral rights, further expand the scope of competitive bidding for mineral rights, and abolish the fees for exploration rights and mining rights, instead collecting revenue from the transfer of mineral rights. It is recommended that the revenue from the transfer of mineral rights be shared between the central and local governments in a 5:5 ratio.

　　Second, in the stage of occupying mining rights, the exploration right usage fee and the mining right usage fee will be adjusted to a mining right occupation fee. Those who occupy mining rights and engage in mineral resource exploration and exploitation shall pay the mining right occupation fee in accordance with the law. The mining right occupation fee will be collected annually by the financial authorities in coordination with the competent departments for mineral resources, based on the area occupied and a fixed rate per unit area. The fee will be allocated to the central and local treasuries in a 2:8 ratio, shared jointly by the central and local governments.

　　Third, in the mineral extraction stage, appropriately integrate the mineral resource compensation fee into the resource tax and improve the resource tax system.

　　Fourth, in the stage of mine environmental remediation and restoration, we will abolish the mine environmental remediation and restoration deposit, establish a mine environmental remediation and restoration fund, set up a dynamic supervision mechanism, promote the internalization of environmental remediation costs, and ensure that mining enterprises truly fulfill their responsibilities for mine environmental remediation and ecological restoration. Mining enterprises must set up separate accounting accounts and, based on the requirements for mine environmental remediation and ecological restoration, set aside a certain percentage of their sales revenue into the mine environmental remediation and restoration fund, which will be included as part of the enterprise’s costs. The funds thus set aside will be used by the enterprises to carry out comprehensive environmental protection and remediation efforts at mines.

　　The supporting reform policies proposed in the “Plan” include:

　　First, the fees for the occupation of mining rights and the proceeds from the transfer of mining rights will be incorporated into general public budget management and centrally allocated by fiscal authorities at all levels for expenditures related to geological surveys and ecological conservation and restoration.

　　Second, the policy of converting mineral rights payments made by geological exploration units into capital contributions will be canceled.

　　Third, the policy requiring supplementary payment of mining rights fees that had already been converted into state-owned capital is canceled.

　　Comment

　　Promoting competitive bidding for mining rights, strictly limiting the transfer of mining rights through agreements, adjusting the approval authority for mining rights, strengthening regulatory oversight and services related to their transfer, and improving the system for transferring mining rights are all crucial safeguards for protecting the state’s ownership rights over mineral resources. The issuance of this document, with the core objective of safeguarding and realizing the fundamental rights of the state in mineral resources, aims to streamline the tax and fee system for mineral resources, appropriately regulate revenue from mineral resource exploitation, and establish a new system of mineral resource royalties that is tailored to China’s specific characteristics.