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A view of West Lake in Hangzhou. Visual China Archive
In order to continuously create a first-class legal business environment, the General Office of the Hangzhou Municipal Government recently issued the &#34;Implementation Opinions on Actively Promoting Inclusive and Prudent Regulatory Enforcement to Further Optimize the Legal Business Environment&#34; (hereinafter referred to as the &#34;Implementation Opinions&#34;). It proposes that for enterprises in emerging fields, priority should be given to administrative guidance methods such as education reminders, demonstration persuasion, warning admonitions, and guidance talks, while being cautious in using administrative penalties and administrative coercive measures.
The &#34;Implementation Opinions&#34; will take effect on June 1 and aims to transform enforcement concepts and innovate enforcement methods, making administrative supervision and inspections less intrusive, administrative coercion and penalties more prudent, and administrative guidance and services more precise, with the principles of &#34;no disturbance without issues, responding to all requests, managing risks, and being inclusive and prudent,&#34; providing a more solid legal guarantee for high-quality economic and social development.
The &#34;Implementation Opinions&#34; propose 10 key measures focusing on implementing inclusive and prudent regulatory enforcement, mainly involving differentiated and precise regulation, standardizing administrative inspections related to enterprises, improving the system of inclusive and prudent regulations, and strengthening credit linkage and administrative guidance.
Among them, regarding differentiated and precise regulation, the &#34;Implementation Opinions&#34; state that safety bottom lines must be adhered to, increasing enforcement efforts in key areas that relate to the vital interests of the people, such as food and drug safety, production safety, ecological environment, public health, natural resources, labor protection, urban management, transportation, financial services, and education and training. For areas with significant potential risks that may lead to serious adverse consequences, daily supervision and enforcement inspections will be strengthened to prevent and resolve illegal risks from the source.
At the same time, innovative regulatory models for emerging fields will be developed. Focusing on new business formats such as artificial intelligence, data elements, and low-altitude economy, local legislative research will be strengthened to ensure that administrative supervision has legal backing. Under the premise of strictly adhering to the three bottom lines of safety, quality, and ethics, innovative regulatory mechanisms such as &#34;sandbox regulation&#34; and &#34;enforcement observation periods&#34; will be explored. Except for situations explicitly prohibited by laws, regulations, and rules, or those involving harm to public safety and the health of the people, enterprises in new technologies and industries that align with national and provincial policy directions and have development prospects will be prioritized for administrative guidance methods such as education reminders, demonstration persuasion, warning admonitions, and guidance talks, while being cautious in using administrative penalties and administrative coercive measures, minimizing the impact on the normal production and operation activities of market entities.
Regarding the standardization of administrative inspections related to enterprises, the &#34;Implementation Opinions&#34; clearly state that a comprehensive list of administrative inspection items will be compiled and promptly published to the public, ensuring that &#34;no inspections occur outside the list.&#34; Remote supervision, mobile supervision, online supervision, and other non-on-site inspection methods with IoT sensing capabilities will be vigorously promoted. A hierarchical and classified inspection system will be improved, exploring the use of electronic business licenses &#34;enterprise codes&#34; to strengthen information sharing related to enterprises, and conducting precise profiling based on enterprise operational information, safety elements, and credit evaluation levels, linking the profiling results with differentiated non-on-site inspections and on-site inspections, inspection frequency, and sampling ratios. Those with good comprehensive conditions may be subject to fewer inspections or no inspections within the year
In terms of establishing a sound and inclusive prudent regulatory system, the &#34;Implementation Opinions&#34; propose that, following the principle of &#34;whoever is in charge, whoever prepares,&#34; administrative authorities should comprehensively sort out current law enforcement matters, clean up according to statutory powers, and formulate and publish lists of discretionary powers for administrative penalties, as well as lists for non-penalties, lighter penalties, mitigated penalties, and non-administrative enforcement matters.
When administrative agencies intend to impose penalties, they must adhere to the principles of &#34;combining education and punishment&#34; and &#34;proportionality between offense and penalty,&#34; and broadly use methods such as persuasive education, guidance, and discussions in accordance with the law. They should explore establishing an economic and social impact assessment system for administrative law enforcement cases involving enterprises to reduce the impact of administrative law enforcement on businesses.
Regarding strengthening credit linkage and administrative guidance, the &#34;Implementation Opinions&#34; require the establishment of a sound credit linkage management mechanism for administrative law enforcement involving enterprises. They promote a &#34;three documents delivered simultaneously&#34; mechanism for credit repair notification letters, standardized business recommendations, and administrative penalty decisions. A cross-departmental collaborative mechanism for credit repair should be established to achieve &#34;one repair, simultaneous action everywhere.&#34; They should explore including the formulation of measures for punishing dishonesty within the scope of legality review to prevent improper use or even abuse.
On the other hand, the administrative guidance system should be fully implemented, integrating administrative guidance throughout the entire process of administrative management. When administrative guidance can achieve administrative management objectives, non-coercive methods such as administrative guidance should be prioritized. A model of &#34;prevention first, minor offenses exempt from penalties, severe penalties for serious violations, proportionality between offense and penalty, and post-event evaluation&#34; should be comprehensively promoted through multi-departmental joint assistance and rectification.
Finally, the &#34;Implementation Opinions&#34; state that all localities and units should actively promote inclusive and prudent regulatory enforcement as an important measure to optimize the business environment, strengthen overall coordination, regularly study and deploy, and promptly analyze and address new situations and problems encountered in work. At the same time, they should coordinate legal reviews, law enforcement inspections, and case file evaluations to strengthen supervision over the implementation of measures related to inclusive and prudent regulatory enforcement, conduct timely research and evaluation, and promptly identify problems and urge rectification

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The Hangzhou Municipal Government Office has issued implementation opinions, emphasizing that administrative measures such as education and guidance should be prioritized for emerging sector enterprises, and that administrative penalties and coercive measures should be used cautiously to optimize the legal business environment

- The Hangzhou municipal government has issued an implementation opinion aimed at promoting a cautious and inclusive regulatory approach to optimize the business environment, effective from June 1.  
- This policy prioritizes administrative guidance methods such as education and advisory, minimizing the use of punitive measures for emerging sector enterprises, emphasizing differentiated supervision across various critical areas.  
- By improving regulatory mechanisms and focusing on non-intrusive oversight, the initiative seeks to enhance economic development while ensuring safety and compliance, addressing potential risks proactively.

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Hangzhou official statement: Exercise caution in using administrative penalties and other law enforcement measures against emerging sector enterprises