CHINA Trends and Developments Contributed by: Huihui Li, James Hu, Yingjie Kang, Sherry Xu, Bivio Yu and Lisa Zhao, Fangda Partners
Trends in Strengthened Protection for Older Employees and Refined Competition Restrictions Gradual retirement age increase drives new protections China is gradually raising its statutory retirement age, following a decision by the National People’s Con - gress Standing Committee in September 2024. This reform has led to new measures protecting older workers who continue employment beyond retirement age. Employers now face clearer obligations to ensure fair treatment and legal certainty. A draft of Interim Provisions on the Protection of Basic Rights and Interests of Older Workers was released for public comment in 2025. These Provisions aim to require employers to sign written agreements with such workers, specifying terms for pay, rest, safety and insurance. Overtime is generally discouraged, and work-related injury insurance contribution remains mandatory for employers. The Judicial Interpretation of the Supreme People’s Court on Certain Issues Concerning the Application of Law in the Trial of Labor Dispute Cases (II) (“Judi - cial Interpretation II”), effective 1 September 2025, has removed prior guidance that disputes involving pension recipients are only service relationships. This shift may sustain debates over the legal status for employees over the retirement age but not yet eligi - ble for a pension. It will fall to future judicial practice to determine whether an employment relationship can be established for this group. New guidelines on non-compete restrictions The Judicial Interpretation II refines competition restrictions by invalidating clauses applied to employ - ees without access to trade secrets. Overly broad restrictions may be partially void, and violations can trigger both penalties and repayment of compensa - tion received. In September 2025, the Ministry of Human Resources and Social Security issued the Compliance Guide - lines for Enterprises on the Implementation of Post- Employment Competition Restrictions, which further emphasise the requirement for necessity and rea - sonableness in respect of non-compete restrictions. Employers are cautioned against excessive scope in
relation to clauses around personnel, business activi - ties or geography. In addition, non-compete compen - sation must be paid monthly in cash during the non- compete period and cannot be offset by prior wages or bonuses. These updates signal a maturing framework balancing employer interests in talent retention and trade secret protection with the fundamental employment rights of employees, especially for an ageing workforce. Companies should promptly review HR policies, employment templates and competition agreements to align with the new standards. Accurate role classifi - cation and proactive management of older employees will help ensure compliance and reduce risks. Trends in Taxation In general, the trends and developments in taxation are characterised by key words such as digitisation, intelligence and globalisation, and taxpayers need to constantly learn and adapt to these changes to ensure tax compliance in an efficient and effective manner. Specifically, the following should be noted. • Through the application and evolution of digital tax administration systems and big data analysis, tax authorities have stepped up efforts in compar - ing data, analysing issues, assessing cases and identifying compliance issues of taxpayers, thus improving the efficiency and effectiveness of tax collection and administration. • The widespread application of artificial intelligence has led to continuous improvement in tax supervi - sion and administration, and made it possible for tax authorities to detect and take precautionary measures against cases involving fraud. • With the further development of global economic integration, international organisations and govern - ments of various countries/regions have strength - ened tax information exchange and co-operate to jointly combat cross-border tax evasion. The formulation and implementation of international tax rules is an important part of global tax co-opera - tion. • The State Taxation Administration adopts an open and co-operative approach to such international tax co-operation projects as the “Two-Pillar Solu -
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