To implement the Asset Valuation Law, further strengthen fiscal supervision and management of the asset valuation industry, and promote the healthy development of the industry, on April 21, 2017, the Ministry of Finance formulated and issued the “Measures for Fiscal Supervision and Management of the Asset Valuation Industry” (Ministry of Finance Order No. 86, hereinafter referred to as the “Measures”), which took effect on June 1, 2017. The “Measures for the Approval and Supervision and Management of Asset Valuation Agencies” (Ministry of Finance Order No. 64, hereinafter referred to as Ministry of Finance Order No. 64), issued on August 11, 2011, was simultaneously repealed. Recently, a senior official from the Ministry of Finance answered reporters’ questions regarding the formulation and implementation of the “Measures.”

　　1. Question: Could you please explain the background behind the issuance of these Measures?

　　Answer: Since the 18th National Congress of the Party, as comprehensive deepening of reform has steadily advanced and various reform measures have been continuously introduced, the environment facing the asset valuation industry has undergone significant changes, placing higher demands on its administrative management. To implement the supervisory and regulatory requirements for the asset valuation industry stipulated in the Asset Valuation Law and to reflect the reform spirit of "streamlining administration and delegating power while strengthening regulation" and the regulatory principle of "neither shirking responsibilities nor overstepping boundaries," the Ministry of Finance has formulated and issued the "Measures."

　　First, there is a need to implement and enforce the Asset Valuation Law. The Asset Valuation Law consolidates the achievements of reform and further promotes the shift in the establishment of asset valuation agencies from an approval-based system to a filing-based system. At the same time, it grants the administrative authorities for asset valuation the powers of filing, inspection, investigation, penalty imposition, and the formulation of industry regulatory systems. It requires these administrative authorities to strengthen their supervision and management of the asset valuation industry in accordance with the law, shifting the focus of supervision and management from ex-ante regulation to ex-during and ex-post regulation. The provisions on agency approval stipulated in Ministry of Finance Order No. 64 are no longer consistent with the Asset Valuation Law.

　　Second, there is a need to implement the spirit of the state’s regulatory reforms in the asset valuation industry. Since 2014, the State Council has successively abolished the administrative licensing and certification requirements for the professional qualification of registered asset appraisers, shifted the management of the establishment of asset valuation agencies and other entities from pre-approval to post-approval, and mandated the elimination of any relationships—such as sponsorship, supervision, liaison, or affiliation—between administrative agencies and industry associations and chambers of commerce. To this end, the Ministry of Finance has issued, in succession, the “Notice on Adjusting Relevant Matters Concerning the Approval of Asset Valuation Agencies” and the “Supplementary Notice on Adjusting Relevant Matters Concerning the Approval of Asset Valuation Agencies,” and jointly with the Ministry of Human Resources and Social Security has formulated the “Interim Provisions on the Professional Qualification System for Asset Appraisers,” thereby adjusting the existing regulatory framework for the asset valuation industry. In light of the legislative developments in the Asset Valuation Law, it is necessary to further institutionalize the measures taken to reform the regulation of the asset valuation industry.

　　Third, there is a need to promote the diversified development of the asset valuation industry. As the role of the asset valuation industry in the market economy becomes increasingly important, the demand for diversified development of asset valuation institutions is growing stronger. The economic activities involved in the practice of asset valuation institutions are becoming ever more complex, making it even more critical to strengthen supervision and regulation of these institutions both during and after their operations. Ministry of Finance Order No. 64, which sets forth regulations on the business scope of asset valuation institutions, requirements for shareholders and partners, and conditions for establishing branch offices, has imposed certain restrictions on the diversified development of the industry. There is an urgent need to formulate new regulations in accordance with the law and accordingly enhance provisions related to administrative supervision and management as well as legal responsibilities.

　　2. Question: What are the main significances of the issuance of these Measures?

　　Answer: Overall, the Measures are of great significance for enhancing the administrative management level of the asset valuation industry and promoting its healthy development.

　　First, a system of administrative oversight over the asset valuation industry by fiscal authorities has been established. In line with the spirit of the central government’s deepening reform and in compliance with relevant laws and regulations such as the Asset Valuation Law as well as provisions issued by the State Council, new requirements have emerged regarding the management approach, objects of supervision, establishment and management methods of institutions, content of supervision, inspection, and investigation, and legal responsibilities in the context of the new situation. The “Measures” have accordingly established a new supervisory and management system for the asset valuation industry, introducing a novel principle that integrates administrative oversight, industry self-regulation, and institutional autonomy in management. They clearly define the supervisory content and requirements applicable to valuation professionals, valuation institutions, and valuation associations; delineate the division of administrative oversight responsibilities and functions among fiscal authorities at various levels; and refine the relevant provisions on legal liabilities in asset valuation. The establishment of this new supervisory system has clarified the operational rules governing all relevant entities in the asset valuation industry, ensuring that these entities operate within a well-defined regulatory framework.

　　Second, the Measures have established institutional safeguards for the healthy development of the asset valuation industry. The Measures clearly specify how valuation professionals, valuation institutions, and valuation associations should protect their rights, fulfill their obligations, and assume their responsibilities, which will help stimulate the creativity and entrepreneurial enthusiasm of all valuation professionals and promote the vitality of the valuation industry in practicing the spirit of “mass entrepreneurship and innovation.” The Measures explicitly define the scope of self-management and filing-based management for asset valuation institutions, covering organizational forms and establishment requirements, quality control and internal management, independence, group operations, and professional risk funds—all of which fall under the institutions’ self-management authority. In the filing-based management process, the Measures make full use of information technology to enhance management efficiency, tap into the inherent potential of asset valuation institutions, strengthen quality control and risk prevention within these institutions, and encourage diversified development as well as the pursuit of excellence and greater strength. The Measures also clearly stipulate that the Asset Valuation Association serves as a self-regulatory organization for both asset valuation institutions and professionals, fully leveraging the important role of industry associations in participating in and implementing social governance.

　　Third, it provides a coordinated regulatory framework for the appraisal sector that is tailored to the development of the market economy. Grounded in the realities of China’s appraisal industry, the Appraisal Law innovatively integrates the existing system—under which various administrative departments each exercise separate oversight—into a single legal framework that standardizes management across different specialized appraisal fields. It also mandates the establishment of mechanisms for communication, collaboration, and information sharing to address emerging issues arising from industry development, thereby jointly promoting the healthy and orderly growth of the appraisal sector. Building on the clear division of responsibilities among fiscal authorities in supervising and managing the appraisal industry, the Measures place particular emphasis on coordinating fiscal supervision and management of appraisals with administrative oversight in other appraisal-related areas. Regarding filing and registration, the Measures stipulate that the filing information management system shall share data with other relevant administrative departments. In terms of administrative inspections, the Measures allow fiscal authorities, together with other relevant appraisal administrative departments, to conduct joint inspections. As for handling complaints and reports, when a complaint or report involves the responsibilities of multiple administrative departments simultaneously, a mechanism for joint handling shall be established. The design of this coordination system not only meets the fundamental requirements of administrative management—namely, avoiding conflicts and overstepping boundaries—but also facilitates the effective implementation of the Appraisal Law and promotes the coordinated development of the entire appraisal market.

　　3. Question: Please describe the process behind the formulation of the “Measures.”

　　Answer: In 2014, the State Council comprehensively implemented reform of the administrative approval system. Immediately thereafter, the Ministry of Finance shifted the management of the establishment of asset appraisal institutions from pre-approval to post-approval, and began work on revising Ministry of Finance Order No. 64, including it in the “2015 Fiscal Legislation Work Plan.” In 2015, the Ministry of Finance organized several symposiums to solicit opinions from local finance departments, local appraisal associations, and asset appraisal institutions. Based on these consultations, the Ministry of Finance drafted a revised version of Order No. 64 and publicly solicited comments from the public through channels such as the “China Government Legal Information Network” and the Ministry of Finance’s external website in June 2015.

　　In July 2016, in accordance with the Asset Valuation Law’s provision that “the administrative department for asset valuation under the State Council shall organize the formulation of basic valuation standards and regulatory measures for the asset valuation industry,” we promptly adjusted our legislative approach—from revising Ministry of Finance Order No. 64 to drafting entirely new financial regulatory measures for the asset valuation industry in compliance with the law. In September 2016, after repeated deliberations and detailed examination of each provision, we produced a draft of the Measures and once again publicly solicited comments from the general public and relevant organizations. At the same time, the Ministry of Finance organized two consecutive legislative hearings, inviting legal experts, asset valuation scholars, representatives from asset valuation agencies, and local finance departments to participate in the legislative deliberations. We also held a special symposium with the Legislative Affairs Commission of the Standing Committee of the National People’s Congress, engaging in in-depth exchanges of views and ultimately finalizing the draft Measures.

　　Considering that the draft Measures represent significant adjustments to the current regulatory framework for the asset valuation industry and have a substantial impact on the standardized development of the entire asset valuation sector, our ministry has commissioned Renmin University of China as a third-party institution to conduct a legislative assessment. Following the assessment, Renmin University of China expressed strong endorsement of the draft Measures. On April 21, 2017, after repeated deliberations, revisions, and improvements, and following the completion of the relevant legislative procedures, the Measures were officially promulgated as Ministry of Finance Order No. 86.

　　4. Question: What are the main contents of the “Measures”?

　　Answer: The Measures consist of 8 chapters and 72 articles, covering general provisions, asset valuation professionals, asset valuation institutions, the asset valuation association, supervision and inspection, investigation and handling, legal liabilities, and supplementary provisions. The main contents are as follows: First, it clarifies that the Measures apply to the asset valuation industry, asset valuation services, asset valuation professionals, asset valuation institutions, and asset valuation associations under the regulatory oversight of the financial authorities according to their respective responsibilities. Second, it sets out requirements for asset valuation professionals. Third, it provides detailed regulations on the self-management of asset valuation institutions, the self-regulatory management by the association, and administrative filing and registration procedures. Fourth, in accordance with the principles of separating government from society, clearly defining powers and responsibilities, and ensuring self-governance based on the law, it specifies the management requirements for asset valuation industry associations in line with relevant provisions of the Asset Valuation Law. Fifth, it lists the duties, content, and requirements of the financial authorities’ supervision and inspection work. Sixth, it outlines the content and requirements of the financial authorities’ investigation and handling procedures. Seventh, it includes relevant provisions on legal liabilities. Eighth, it covers regulations on security reviews for foreign-invested asset valuation institutions, as well as provisions regarding the supervisory authority of competent departments at or above the prefectural-level city level.

　　5. Question: Could you please provide a detailed introduction to the scope of application of the “Measures”?

　　Answer: According to the Asset Valuation Law and relevant documents issued by the State Council, China’s valuation industry currently comprises six specialized fields, each under the regulatory oversight of one of five government departments: Finance, Natural Resources, Housing and Urban-Rural Development, Commerce, and Insurance Regulatory Administration. Among these, the asset valuation field overseen by the finance department exhibits comprehensive characteristics; therefore, it is essential to clearly define the scope of application of these Measures. First, the title of the Measures has been designated as the “Measures for the Financial Supervision and Administration of the Asset Valuation Industry,” which helps clarify the respective responsibilities of the departments involved. Second, the scope of regulated activities is specifically limited: namely, the professional services provided by asset valuation agencies and their qualified professionals—upon engagement—to appraise or estimate individual assets, portfolios of assets, enterprise value, financial interests, asset losses, or other economic rights, and to issue asset valuation reports; as well as the financial department’s supervisory and administrative functions over the asset valuation industry—all fall within the scope of these Measures. The Measures further specify that if asset valuation agencies and their professionals engage in the activities described above but such activities are subject to laws, administrative regulations, and State Council provisions administered by other assessment regulatory authorities, they shall comply with the relevant provisions of those other authorities. Third, in the supplementary provisions of the Measures, it is further clarified that the terms “asset valuation industry,” “asset valuation professionals,” “asset valuation agencies,” and “asset valuation associations” refer to the asset valuation industry, professionals, agencies, and associations that are regulated by the finance department according to their respective duties as stipulated in the Asset Valuation Law and State Council regulations. In accordance with the current division of responsibilities among departments, assessment fields outside the purview of the finance department shall be governed by relevant laws, administrative regulations, and the provisions issued by other assessment regulatory authorities, including those responsible for natural resources, housing and urban-rural development, commerce, and insurance supervision.

　　6. Question: What are the specific requirements for asset valuation professionals under the “Measures”?

　　Answer: The Asset Valuation Law categorizes asset valuation professionals into appraisers and other asset valuation practitioners. Based on the scope of fiscal supervision, the “Measures” further classify asset valuation professionals into appraisers (including those specializing in jewelry appraisal—hereinafter the same) and other asset valuation practitioners who possess professional knowledge and practical experience in asset valuation. At the same time, in accordance with the principle of “combining deregulation with regulation,” appraisers from other specialized fields managed by other administrative departments responsible for appraisal shall also be subject to oversight by the fiscal authorities if they engage in asset valuation activities as specified in Article 2 of the “Measures.”

　　7. Q: The establishment of asset valuation agencies and their branches has been changed from approval-based to filing-based management. What specific provisions does the “Measures” contain?

　　Answer: Regarding the filing and management of asset valuation agencies and their branches, the Measures primarily stipulate the following: First, filings will be conducted through an information management system, and the documentation required for filing asset valuation agencies will be simplified to reduce the burden on applicants. However, given that the secure operation of the information system still needs to be verified, paper-based materials will continue to be required for the time being; in the future, depending on circumstances, the requirement for paper materials could be reconsidered and potentially eliminated. Second, the responsibilities of provincial-level fiscal authorities in the filing management have been clarified. If the filing information or materials are incomplete, the provincial-level fiscal authority shall, within 5 working days of receiving the filing materials, notify the applicant once of all the items that need to be corrected and provide guidance. If the filing materials are complete, the provincial-level fiscal authority will complete the filing upon receipt of all materials and, within 20 working days, publicly disclose the relevant information under a formal official letter number. Third, taking into account the actual situation of branch offices of asset valuation agencies, it has been clarified that when an asset valuation agency establishes a branch office, the agency itself must file the establishment with the provincial-level fiscal authority where the branch is located. At the same time, to facilitate the filing process for asset valuation agencies, the provincial-level fiscal authority where the branch is located will inform the provincial-level fiscal authority where the parent agency is located about the branch’s filing status. Fourth, the procedures for changes to significant matters concerning the agency, the filing procedures for cross-provincial relocation of business premises, and the cancellation of filings have been clearly defined. Fifth, it is stipulated that if an asset valuation agency fails to file as required by these Measures, it shall bear legal responsibility accordingly.

　　8. Question: What specific requirements does the “Measures” impose on asset appraisal associations?

　　Answer: In accordance with the principles of separating government from society, clarifying rights and responsibilities, and ensuring self-governance under the rule of law, and based on the provisions of the Asset Valuation Law, the Measures further refine the requirements for asset valuation industry associations. First, it stipulates that the asset valuation association is a self-regulatory organization for asset valuation institutions and professional asset valuers, subject to the supervision of the relevant financial authorities. It must not harm national interests or the public interest, nor may it infringe upon the legitimate rights and interests of its members. Second, it requires that the articles of association of the asset valuation association be filed with the financial regulatory authority, and that the association report to the financial authority on matters such as members’ credit records, the status of self-regulatory inspections conducted by members, and the rewards and punishments imposed on members. Third, it sets forth the self-regulatory management requirements for asset valuation associations, including conducting self-regulatory inspections of the quality of practice and mechanisms for preventing professional risks among asset valuation institutions and their professional valuers, analyzing the materials submitted annually by institutions, and promptly reporting any violations discovered to the financial authority. Fourth, it stipulates that the asset valuation association should strengthen communication and collaboration with other industry associations in related appraisal fields, establishing a mechanism for sharing information on members, practice activities, disciplinary actions, and other relevant matters.

　　9. Question: What regulations does the “Measures” stipulate regarding the supervision and management by the financial authorities?

　　Answer: The primary shift in regulatory oversight lies in transitioning from ex-ante approval to ex-post supervision. First, the responsibilities, content, and requirements for supervisory and inspection activities conducted by fiscal authorities have been clearly defined. The specific division of responsibilities between the Ministry of Finance and local fiscal authorities has been streamlined, and the specific methods for fiscal authorities to carry out supervisory inspections have been stipulated. Second, the content and requirements for investigation and handling activities undertaken by fiscal authorities have been clarified. Compared with supervisory inspections, investigation and handling are characterized by their occasional nature based on specific incidents, the specificity of both the subjects and the content involved, and the passive nature of administrative law enforcement. The Measures include a dedicated chapter specifically regulating the investigative and handling actions of fiscal authorities, detailing the specific circumstances under which fiscal authorities will accept complaints and reports, the scope of cases they will handle, and the entities authorized to file such complaints and reports. Furthermore, the procedures and methods for fiscal authorities to process complaints and reports have been clearly defined.

　　10. Question: How can we effectively carry out the implementation guidance and supervision of the “Measures”?

　　Answer: The “Measures” came into effect on June 1, 2017. To ensure the effective implementation of the “Measures,” fiscal departments and asset appraisal associations at all levels should regard the implementation of the “Measures” as an important component of their current management work in the asset appraisal industry. They should attach great importance to this task, plan carefully, organize meticulously, and earnestly carry out the following work:

　　First, we must earnestly carry out training and publicity efforts. We will prepare explanatory materials for the Measures, organize training sessions on the Measures, and provide systematic training to supervisory and administrative personnel in the provincial asset valuation industry. We will offer detailed explanations and clarifications on the key contents of the Measures, helping relevant personnel accurately understand and grasp the content and requirements of the Measures, thereby ensuring their smooth implementation. Fiscal departments at all levels and asset valuation associations should adopt a variety of channels and formats, making full use of various online platforms to effectively promote the Measures both within and outside the industry. They should proactively answer questions, address concerns, and respond to the interests of all parties, thus fostering a favorable social atmosphere for the steady implementation of the Measures.

　　Second, we must strengthen implementation and organization. The Ministry of Finance will establish relevant systems for implementing the Measures, clearly defining the specific responsibilities, procedures, and requirements for various aspects of fiscal supervision in the asset valuation industry. These systems will provide operational guidance for fiscal supervision and ensure the effective implementation of the Measures. Fiscal departments at all levels should closely monitor the implementation of the Measures, guide asset valuation agencies, valuation professionals, and asset valuation associations in carrying out their implementation tasks, identify any problems encountered during implementation, and promptly report such issues back to the Ministry of Finance. Fiscal departments and asset valuation associations at all levels should also ensure coordination between the Measures and relevant regulatory policies governing specialized areas of asset valuation.

　　Third, we must promptly refine the relevant supporting systems. We should accelerate the development and promulgation of management regulations such as the “Basic Standards for Asset Valuation,” ensuring that these regulations are effectively implemented. In accordance with the requirements of the Asset Valuation Law, the China Association of Asset Appraisers has established and perfected a self-regulatory management system and mechanism for its members, formulated and continuously refined professional practice standards and codes of ethics for asset valuation, and provides guidance and supervision over members’ professional conduct.