The pilot guidance may help multinational companies address certain challenges they have previously faced when doing business with Chinese SOEs.

Key Points:

..Following extensive research and consultation, the SASAC has released pilot guidance for Central Enterprises to better comply with local, national, and international laws and regulations in their business operations, in order to effectively prevent and manage risks associated with compliance.

..With a total of 31 provisions, the guidance outlines specific responsibilities for directors, supervisors, and other individuals at the management level of Central Enterprises. The guidance also requires Central Enterprises to appoint a head of compliance and a compliance committee.

..Chinese and international companies seeking to form joint ventures with, invest into, or acquire Chinese SOEs should apply the provisions highlighted in the guidance to strengthen the compliance capabilities, systems, and management of such SOEs.